Remortgage loan approvals fall by 60 per cent
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The number of remortgage approvals dropped by 60 per cent to 21,282 last month compared with September 2008 according to figures from the British Bankers’ Association released today.
There was better news for house purchase approvals though as they rose by 77 per cent to 42,088 with £5.9bn of house purchase loans approved in September compared to the same month last year.
Legal & General director of mortgages Ben Thompson says: “The remortgage market is as dead as a dodo according to the figures from the BBA, and let’s face it, this situation isn’t going to change much for a long time to come.
“As long as the bank base rate stays this low (and why shouldn’t it given today’s GDP figures) then there is little incentive for borrowers to shift from their SVR.
“Surprisingly, just three months ago around one in four of our mortgage network advisers that we questioned said that they expected remortgages to make up a minimum of 60 per cent of their mortgage business by now. I suspect this might have been a tad optimistic on their part. Competition amongst lenders for remortgage borrowers over 70 per cent LTV is not exactly fierce right now.”
BBA statistics director David Dooks said: “Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year and the number of house purchase approvals continues to recover.
“Housing market activity will depend, however, on more properties coming on to the market. Apart from property decisions, further symptoms of subdued consumer confidence are a reduced appetite for unsecured borrowing and more saving.
“Lending to companies continues to be affected by current trading conditions. In perhaps the hardest-hit sectors, related to commercial property and construction, lending levels continue to fall and company borrowing in general remains subdued.”
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